HB0281 101ST GENERAL ASSEMBLY

LRB101 00385 LNS 45391 b

101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB0281

Introduced , by Rep. Will Guzzardi

SYNOPSIS AS INTRODUCED:

735 ILCS 5/2-201.5 new
735 ILCS 5/2-1303	from Ch. 110, par. 2-1303
735 ILCS 5/2-1602
735 ILCS 5/12-108	from Ch. 110, par. 12-108
735 ILCS 5/12-109	from Ch. 110, par. 12-109
735 ILCS 5/12-803	from Ch. 110, par. 12-803
735 ILCS 5/12-901	from Ch. 110, par. 12-901
735 ILCS 5/12-1001	from Ch. 110, par. 12-1001
815 ILCS 205/4.06 new

Amends the Code of Civil Procedure. Provides that a summons issued in an action to collect a debt shall include a separate notice containing specified language regarding debtor rights. Provides that the clerk of the court shall cause the notice to be posted in courtrooms or in the hallway in front of courtrooms and be available for distribution in all courtrooms hearing cases involving debt collection matters. Provides that a judgment may be revived by filing a petition to revive the judgment in the fifth year after its entry (instead of the seventh year after its entry, or in the seventh year after its last revival, or in the twentieth year after its entry, or at any other time within 20 years after its entry if the judgment becomes dormant). Provides that a petition to revive the judgment may be granted only if citation proceedings were initiated within one year of the judgment being entered. Changes the limitations period for the enforcement of certain judgments from 7 to 5 years. Makes changes in provisions governing: wages subject to garnishment; the homestead exemption from judgments; and personal property exempt from judgments. Amends the Interest Act. Provides that consumer debt judgments of $25,000 or less shall draw interest at a rate of 2% per annum. Effective immediately.

A BILL FOR

AN ACT concerning civil law.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Code of Civil Procedure is amended by changing Sections 2-1303, 2-1602, 12-108, 12-109, 12-803, 12-901, and 12-1001, and by adding Section 2-201.5 as follows:

(735 ILCS 5/2-201.5 new)

Sec. 2-201.5. Debtor notice.

(a) A summons issued in an action to collect a debt shall include a separate notice containing the following language printed prominently in large font:

"IF YOU OWE A DEBT, YOU HAVE RIGHTS

You Can PROTECT:

Your Social Security

Your SSI

Your Public Benefits

Your Veterans Benefits

Your Retirement Benefits

$7,500 in Equity in a Motor Vehicle

$150,000 to $200,000 in Equity in your Home

$15,000 in your Bank Account

You Can STOP:

Phone Calls from Debt Collectors

Verbal Abuse from Debt Collectors

Threats from Debt Collectors

You Have the RIGHT:

To Privacy

To Have the Court Review Any Agreement to Settle Your Case

To Ask for a Reasonable Payment Plan".

(b) The clerk of the court, in consultation with civil legal service providers who service the applicable judicial circuit, shall compile a list of civil legal service providers, including their addresses and telephone numbers, and make the list available to the public. The notice in subsection (a) shall include the list of civil legal service providers complied by the clerk of the court.

(c) The clerk of the court shall cause the notice in subsection (a) to be posted in courtrooms or in the hallway in front of courtrooms and be available for distribution in all courtrooms hearing cases involving debt collection matters.

(735 ILCS 5/2-1303) (from Ch. 110, par. 2-1303)

Sec. 2-1303. Interest on judgment. Except as provided in Section 4.06 of the Interest Act, judgments Judgments recovered in any court shall draw interest at the rate of 9% per annum from the date of the judgment until satisfied or 6% per annum when the judgment debtor is a unit of local government, as defined in Section 1 of Article VII of the Constitution, a school district, a community college district, or any other governmental entity. When judgment is entered upon any award, report or verdict, interest shall be computed at the above rate, from the time when made or rendered to the time of entering judgment upon the same, and included in the judgment. Interest shall be computed and charged only on the unsatisfied portion of the judgment as it exists from time to time. The judgment debtor may by tender of payment of judgment, costs and interest accrued to the date of tender, stop the further accrual of interest on such judgment notwithstanding the prosecution of an appeal, or other steps to reverse, vacate or modify the judgment.

(Source: P.A. 85-907.)

(735 ILCS 5/2-1602)

Sec. 2-1602. Revival of judgment.

(a) A judgment may be revived by filing a petition to revive the judgment in the fifth seventh year after its entry, or in the seventh year after its last revival, or in the twentieth year after its entry, or at any other time within 20 years after its entry if the judgment becomes dormant and by serving the petition and entering a court order for revival as provided in the following subsections. The provisions of Public Act 96-305 this amendatory Act of the 96th General Assembly are declarative of existing law.

(b) A petition to revive a judgment shall be filed in the original case in which the judgment was entered. The petition shall include a statement as to the original date and amount of the judgment, court costs expended, accrued interest, and credits to the judgment, if any. The petition to revive the judgment may be granted only if citation proceedings under Section 2-1402 were initiated within one year of the judgment being entered.

(c) Service of notice of the petition to revive a judgment shall be made in accordance with Supreme Court Rule 106.

(d) An order reviving a judgment shall be for the original amount of the judgment. The plaintiff may recover interest and court costs from the date of the original judgment. Credits to the judgment shall be reflected by the plaintiff in supplemental proceedings or execution.

(e) If a judgment debtor has filed for protection under the United States Bankruptcy Code and failed to successfully adjudicate and remove a lien filed by a judgment creditor, then the judgment may be revived only as to the property to which a lien attached before the filing of the bankruptcy action.

(f) A judgment may be revived as to fewer than all judgment debtors, and such order for revival of judgment shall be final, appealable, and enforceable.

(g) This Section does not apply to a child support judgment or to a judgment recovered in an action for damages for an injury described in Section 13-214.1, which need not be revived as provided in this Section and which may be enforced at any time as provided in Section 12-108.

(h) If a judgment becomes dormant during the pendency of an enforcement proceeding against wages under Part 14 of this Article or under Article XII, the enforcement may continue to conclusion without revival of the underlying judgment so long as the enforcement is done under court supervision and includes a wage deduction order or turn over order and is against an employer, garnishee, or other third party respondent.

(Source: P.A. 98-557, eff. 1-1-14; 99-744, eff. 8-5-16.)

(735 ILCS 5/12-108) (from Ch. 110, par. 12-108)

Sec. 12-108. Limitation on enforcement.

(a) Except as herein provided, no judgment shall be enforced after the expiration of 5 7 years from the time the same is rendered, except upon the revival of the same by a proceeding provided by Section 2-1601 of this Act; but real estate, levied upon within the 5 7 years, may be sold to enforce the judgment at any time within one year after the expiration of the 5 7 years. A judgment recovered in an action for damages for an injury described in Section 13-214.1 may be enforced at any time. Child support judgments, including those arising by operation of law, may be enforced at any time.

(b) No judgment shall be enforced against a police officer employed by a municipality if the corporate authority of the municipality files with the clerk of the court in which the judgment was entered a statement certifying: (1) such police officer was employed by the municipality and was within the scope and course of his employment at the time of the occurrence giving rise to the action in which the judgment is entered and (2) the municipality indemnifies the police officer in the amount of the judgment and interest thereon. In such event, the judgment creditor may enforce the judgment against the municipality in the same manner and to the same extent as if the municipality were the judgment debtor.

(Source: P.A. 90-18, eff. 7-1-97.)

(735 ILCS 5/12-109) (from Ch. 110, par. 12-109)

Sec. 12-109. Interest on judgments.

(a) Except as provided in Section 4.06 of the Interest Act, every Every judgment except those arising by operation of law from child support orders shall bear interest thereon as provided in Section 2-1303.

(b) Every judgment arising by operation of law from a child support order shall bear interest as provided in this subsection. The interest on judgments arising by operation of law from child support orders shall be calculated by applying one-twelfth of the current statutory interest rate as provided in Section 2-1303 to the unpaid child support balance as of the end of each calendar month. The unpaid child support balance at the end of the month is the total amount of child support ordered, excluding the child support that was due for that month to the extent that it was not paid in that month and including judgments for retroactive child support, less all payments received and applied as set forth in this subsection. The accrued interest shall not be included in the unpaid child support balance when calculating interest at the end of the month. The unpaid child support balance as of the end of each month shall be determined by calculating the current monthly child support obligation and applying all payments received for that month, except federal income tax refund intercepts, first to the current monthly child support obligation and then applying any payments in excess of the current monthly child support obligation to the unpaid child support balance owed from previous months. The current monthly child support obligation shall be determined from the document that established the support obligation. Federal income tax refund intercepts and any payments in excess of the current monthly child support obligation shall be applied to the unpaid child support balance. Any payments in excess of the current monthly child support obligation and the unpaid child support balance shall be applied to the accrued interest on the unpaid child support balance. Interest on child support obligations may be collected by any means available under State law for the collection of child support judgments.

(Source: P.A. 98-563, eff. 8-27-13.)

(735 ILCS 5/12-803) (from Ch. 110, par. 12-803)

Sec. 12-803. Wages subject to collection.

(a) The wages, salary, commissions and bonuses protected from subject to collection under a deduction order, for any work week shall be the greater of: lesser of (1) 15%

(1) 90% of such gross amount paid for that week; or

(2) the amount by which disposable earnings for a week exceed 60 45 times the Federal Minimum Hourly Wage prescribed by Section 206(a)(1) of Title 29 of the United States Code, as amended, or, under a wage deduction summons served on or after January 1, 2006, the minimum hourly wage prescribed by Section 4 of the Minimum Wage Law, whichever is greater, in effect at the time the amounts are payable.

(b) This Section provision (and no other) applies irrespective of the place where the compensation was earned or payable and the State where the employee resides. No amounts required by law to be withheld may be taken from the amount collected by the creditor. The term "disposable earnings" means that part of the earnings of any individual remaining after the deduction from those earnings of any amounts required by law to be withheld. "Deduction from those earnings" includes, but is not limited to, deductions for health insurance, deductions for transportation, and pre-tax flexible spending deductions.

(Source: P.A. 94-306, eff. 1-1-06; 95-661, eff. 1-1-08.)

(735 ILCS 5/12-901) (from Ch. 110, par. 12-901)

Sec. 12-901. Amount. Every individual is entitled to an estate of homestead to the extent in value of $150,000 $15,000 of his or her interest in a farm or lot of land and buildings thereon, a condominium, or personal property, owned or rightly possessed by lease or otherwise and occupied by him or her as a residence, or in a cooperative that owns property that the individual uses as a residence. That homestead and all right in and title to that homestead is exempt from attachment, judgment, levy, or judgment sale for the payment of his or her debts or other purposes and from the laws of conveyance, descent, and legacy, except as provided in this Code or in Section 20-6 of the Probate Act of 1975. This Section is not applicable between joint tenants or tenants in common but it is applicable as to any creditors of those persons. If 2 or more individuals own property that is exempt as a homestead, the value of the exemption of each individual may not exceed his or her proportionate share of $200,000 $30,000 based upon percentage of ownership.

(Source: P.A. 94-293, eff. 1-1-06.)

(735 ILCS 5/12-1001) (from Ch. 110, par. 12-1001)

Sec. 12-1001. Personal property exempt. The following personal property, owned by the debtor, is exempt from judgment, attachment, or distress for rent:

(a) The necessary wearing apparel, bible, school books, and family pictures of the debtor and the debtor's dependents;

(b) The debtor's equity interest, not to exceed $15,000 $4,000 in value, in any other property;

(c) The debtor's equity interest, not to exceed $7,500 $2,400 in value, in any one motor vehicle;

(d) The debtor's equity interest, not to exceed $3,000 $1,500 in value, in any implements, professional books, or tools of the trade of the debtor;

(e) Professionally prescribed health aids for the debtor or a dependent of the debtor;

(f) All proceeds payable because of the death of the insured and the aggregate net cash value of any or all life insurance and endowment policies and annuity contracts payable to a wife or husband of the insured, or to a child, parent, or other person dependent upon the insured, or to a revocable or irrevocable trust which names the wife or husband of the insured or which names a child, parent, or other person dependent upon the insured as the primary beneficiary of the trust, whether the power to change the beneficiary is reserved to the insured or not and whether the insured or the insured's estate is a contingent beneficiary or not;

(g) The debtor's right to receive:

(1) a social security benefit, unemployment compensation, or public assistance benefit;

(2) a veteran's benefit;

(3) a disability, illness, or unemployment benefit; and

(4) alimony, support, or separate maintenance, to the extent reasonably necessary for the support of the debtor and any dependent of the debtor.

(h) The debtor's right to receive, or property that is traceable to:

(1) an award under a crime victim's reparation law;

(2) a payment on account of the wrongful death of an individual of whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor;

(3) a payment under a life insurance contract that insured the life of an individual of whom the debtor was a dependent, to the extent reasonably necessary for the support of the debtor or a dependent of the debtor;

(4) a payment, not to exceed $15,000 in value, on account of personal bodily injury of the debtor or an individual of whom the debtor was a dependent; and

(5) any restitution payments made to persons pursuant to the federal Civil Liberties Act of 1988 and the Aleutian and Pribilof Island Restitution Act, P.L. 100-383.

For purposes of this subsection (h), a debtor's right to receive an award or payment shall be exempt for a maximum of 2 years after the debtor's right to receive the award or payment accrues; property traceable to an award or payment shall be exempt for a maximum of 5 years after the award or payment accrues; and an award or payment and property traceable to an award or payment shall be exempt only to the extent of the amount of the award or payment, without interest or appreciation from the date of the award or payment.

(i) The debtor's right to receive an award under Part 20 of Article II of this Code relating to crime victims' awards.

(j) Moneys held in an account invested in the Illinois College Savings Pool of which the debtor is a participant or donor and funds invested in an ABLE Account as defined by Section 529 of the Internal Revenue Code, except the following non-exempt contributions:

(1) any contribution to such account by the debtor as participant or donor that is made with the actual intent to hinder, delay, or defraud any creditor of the debtor;

(2) any contributions to such account by the debtor as participant during the 365 day period prior to the date of filing of the debtor's petition for bankruptcy that, in the aggregate during such period, exceed the amount of the annual gift tax exclusion under Section 2503(b) of the Internal Revenue Code of 1986, as amended, in effect at the time of contribution; or

(3) any contributions to such account by the debtor as participant during the period commencing 730 days prior to and ending 366 days prior to the date of filing of the debtor's petition for bankruptcy that, in the aggregate during such period, exceed the amount of the annual gift tax exclusion under Section 2503(b) of the Internal Revenue Code of 1986, as amended, in effect at the time of contribution.

For purposes of this subsection (j), "account" includes all accounts for a particular designated beneficiary, of which the debtor is a participant or donor.

(k) In each checking or savings account held by the debtor, an amount not to exceed $4,000, until:

(1) a hearing has been held; and

(2) the debtor has been given a reasonable opportunity to indicate to which personal property he or she seeks to apply the exemption in subsection (b), at which time the debtor may protect up to $15,000 of equity in any personal property, and the funds in a checking or savings account will either remain protected or be subject to garnishment.

Upon receiving a citation to discover assets, a financial institution shall not freeze the debtor's access or turn over to the judgment creditor the amount in the debtor's account that is $15,000 or less, but shall inform the court and the judgment creditor of the exempt amount. Any funds disbursed prior to the hearing that is not exempt under this Section may be recovered if the disbursement was a fraudulent transfer.

(l) Money due the debtor from the sale of any personal property that was exempt from judgment, attachment, or distress for rent at the time of the sale is exempt from attachment and garnishment to the same extent that the property would be exempt had the same not been sold by the debtor.

If a debtor owns property exempt under this Section and he or she purchased that property with the intent of converting nonexempt property into exempt property or in fraud of his or her creditors, that property shall not be exempt from judgment, attachment, or distress for rent. Property acquired within 6 months of the filing of the petition for bankruptcy shall be presumed to have been acquired in contemplation of bankruptcy.

The personal property exemptions set forth in this Section shall apply only to individuals and only to personal property that is used for personal rather than business purposes. The personal property exemptions set forth in this Section shall not apply to or be allowed against any money, salary, or wages due or to become due to the debtor that are required to be withheld in a wage deduction proceeding under Part 8 of this Article XII.

(Source: P.A. 100-922, eff. 1-1-19.)

Section 10. The Interest Act is amended by adding Section 4.06 as follows:

(815 ILCS 205/4.06 new)

Sec. 4.06. Interest on judgments arising out of consumer debt.

(a) As used in this Section:

"Consumer debt" means money or property, or the equivalent, due or owing or alleged to be due or owing from a natural person by reason of a transaction in which property, service, or money is acquired by that natural person primarily for personal, family, or household purposes.

"Consumer debt judgment" means a judgment recovered in any court against one or more natural persons arising out of consumer debt. "Consumer debt judgment" does not include any compensation for bodily injury or death.

(b) Notwithstanding Sections 2-1303 and 12-109 of the Code of Civil Procedure, consumer debt judgments of $25,000 or less shall draw interest from the date of the judgment until satisfied at the rate of 2% per annum.

(c) When a consumer debt judgment is entered upon any award, report, or verdict, interest shall be computed at the applicable rate, from the time when made or rendered to the time of entering judgment upon the same, and included in the judgment. Interest shall be computed and charged only on the unsatisfied portion of the consumer debt judgment as it exists from time to time. The judgment debtor may, by tender of payment of judgment, costs, and interest accrued to the date of tender, stop the further accrual of interest on the consumer debt judgment, notwithstanding the prosecution of an appeal, or other steps to reverse, vacate, or modify the judgment.

(d) This Section applies to all consumer debt judgments entered after the effective date of this amendatory Act of the 101st General Assembly.

Section 99. Effective date. This Act takes effect upon becoming law.